tax questions

Every year I get asked many “what can I claim” tax questions by clients but for some reason they are all the same questions every year. Here are my explanations for the top 5 most commonly asked questions:

1. UNIFORM AND LAUNDRY expenses - for a person to be able to claim uniforms it must be a UNIFORM - a uniform is a specific occupation uniform such as a nurse or bank office where the there may be a "logo" and it is a specific colour or shape. Wearing a suit is NOT a uniform. Wearing a nice white shirt or dress at work because the boss asked you to wear is NOT a uniform.  

 2. TRAVEL TO AND FROM WORK - the tax man is very clear that "travelling between home and work is NOT allowed". If you are required to use your own car to go to, say, the bank to do the banking or visit other sites YES you can claim that but you must keep a logbook or make a reasonable calculation of how many kms you have travelled.

 3. TRAVEL OR MEAL ALLOWANCES - if your employer pays you travel allowance then keep records of what kms you did to earn that allowance. Remember! most allowances are paid to you tax-free but come end of the year they need to be included in your taxable income so unless you have deductions to offset them you will pay extra tax.  Same applies to meal allowances.  

4. MOBILE PHONES - how much you can claim depends very much on how much YOU think you use it for work. There is no formula set by the tax man it is up to you to calculate it. I hate having to advise on this because there is no specific answer and my gut feeling is NONE of it is really a business claim. Mobile phone expenses need to be apportioned with regards to itemised account, detailing work and non-work related calls against total costs (even if the fees are capped). My personal test is this – if work requires you to use your mobile phone business then ask the employer to pay for it – end of subject.

 5. HOME COMPUTER – this is also an interesting one and not an easy one to explain when you consider that almost all of us have a computer in our homes. The tax requirement is that YOU must justify the business use of a computer. My gut feeling is that not many people can justify the use of their home computers for business. Same as the mobile phone – if work requires you to use a computer at home then simply ask the employer to provide you with a company computer.

If you have questions specific to your situation, feel free to call me or email me.